Interest expense recognized each period on zero-coupon bonds sold at a discount is equal to the

A) credit to Cash
B) difference between the cash payment and the discount amortization
C) credit to Discount on Bonds Payable
D) sum of the cash payment and the discount amortization

Zero-Coupon Bonds

Bonds that do not pay periodic interest payments, instead being sold at a discount from their face value and maturing at said value.

Discount Amortization

Discount Amortization refers to the process of gradually reducing the book value of a bond discount over the life of the bond until it reaches its par value.

Interest Expense

This represents the cost incurred by an entity for borrowed funds, which can include loans, bonds, or lines of credit.